Exhibit
10.16


 


 


 


DEALER
AGREEMENT


 


Agreement
entered into, by and between AgEagle Aerial Systems, Inc., a Kansas, USA corporation having its principal place of business at
Neodesha, Kansas 66757, USA (“SUPPLIER"), and Agribotix LLC, a Colorado limited liability company having its principal
place of business at 3309 Airport Road, Boulder, CO 80301 ("DEALER").


 


IT
IS AGREED:


 


		1.	Appointment.
                                         SUPPLIER appoints DEALER to serve during the term of this Agreement as an authorized
                                         dealer of the Products, and DEALER accepts such appointment. DEALER agrees not to promote
                                         AgEagle products below the minimum suggested retail cost.



 


		1.1	Definition
                                         of "Products." The term "Products" will mean all Products
                                         offered for sale by SUPPLIER generally, as set forth and described in SUPPLIER's then
                                         current published price list (Price List) in effect at the date of this agreement. Products
                                         may be added to or deleted from the Price List by SUPPLIER upon thirty (30) days prior
                                         written notice to DEALER. SUPPLIER may, in its sole discretion, alter the specifications
                                         for any Product.



 


		2.	Term.
                                         The term of this agreement will be twelve (12) months from the Effective Date of
                                         this Agreement. The Agreement is automatically renewed for one-year periods at all anniversary
                                         dates unless this Agreement is otherwise terminated. Either party may terminate this
                                         Agreement at the end of a Term by notifying the other party of its intention to not renew
                                         this Agreement within 60 or more days notice prior to expiration. 



 


		3.	Duties
                                         of DEALER. DEALER will:



 


		3.1	Use
                                         reasonable commercial efforts to promote the sale of SUPPLIER’s Products within
                                         the United States commencing no earlier than January 1, 2018 and after DEALER's presentation
                                         to SUPPLIER of DEALER'S proposed Marketing Plan to support such sales. [Note that
                                         selling products beyond the dealers ability to service within 12 hours is a breach of
                                         this Agreement and may be subject to Termination for cause as described in 16.2(d) below.]



		3.2	Provide
                                         timely delivery of Products to DEALER’s customers; 



		3.3	Provide
                                         SUPPLIER with sales activity reports in a mutually agreeable format; and



		3.4	Hold
                                         appropriate levels of inventory to ensure prompt and timely delivery of products to customers;



		3.5	Avoid
                                         deceptive, misleading or unethical practices that may be detrimental to SUPPLIER or the
                                         Products; 



		3.6	Send
                                         personnel to SUPPLIER’S training programs;



 


 







 


    

     


 


		3.7	Train
                                         and educate customers on safe operations of all components and appropriate federal and
                                         local regulations; 



		3.8	Not
                                         disclose confidential information, including fees or specific terms of the Dealer Agreement
                                         to any third party without prior written consent of SUPPLIER; 



		3.9	Notify
                                         SUPPLIER of any shortage or nonconformities in any shipment within 10 days of DEALER’S
                                         receipt of such shipment. If DEALER does not provide any notice of shortfall or nonconformity
                                         within such 10-day period, the shipment will be deemed accepted; and



		3.10	Not
                                         accept any box or package from AgEagle that appear to be damaged by the shipper. 



 


		4.	Duties
                                         of SUPPLIER. SUPPLIER, at no cost to DEALER, will provide to DEALER in a timely
                                         manner:



 


		4.1	The
                                         current price and Product information in a PDF format that will allow DEALER to provide
                                         such information to DEALER’s customers;



		4.2	Sufficient
                                         quantities of marketing materials for sales programs;



		4.3	Adequate
                                         training;



		4.4	Technical
                                         support for all SUPPLIER’s Products sold by DEALER;



		4.5	Assurances
                                         that the Products, as manufactured and sold to DEALER, fully comply with all applicable
                                         laws, standards, codes and regulations; are appropriately marked and labeled in accordance
                                         with all applicable laws, standards, codes and regulations; and suitable for dealer;
                                         and



		4.6	Notification
                                         of whether any Product has been discontinued.



 


		5.	DEALER
                                         Sales Activity Reports. If required by SUPPLIER, within five (5) business days
                                         after the end of each quarter, DEALER will send to SUPPLIER:



 


		5.1	A
                                         stock status report showing the quarter-end, on-hand quantities of SUPPLIER’s Products
                                         by device type and warehouse location; and



		5.2	A
                                         point-of-sale report showing Product sales for the quarter just ended by device type,
                                         customer name and address, quantities and sales price, for SUPPLIER’s Products.



 


		6.	SUPPLIER
                                         Reports. Within five business days after the end of each quarter, SUPPLIER will
                                         send to DEALER, in a mutually agreeable format, an open status report, listing all accepted
                                         orders that have not yet been shipped, and indicating the part number, quantity, order
                                         date, purchase order number and Acknowledged Shipment Date for each such order. SUPPLIER
                                         reserves the right to allocate the supply of Product between its Customers in its sole
                                         discretion.



 


		7.	Audits.
                                         Not more than once during any year or additional audits if mutually agreed up in
                                         advance, upon reasonable prior written notice, SUPPLIER may at its cost:



 


		7.1	Audit
                                         those records of DEALER at DEALER’s corporate headquarters, which pertain solely,
                                         and exclusively to purchases of SUPPLIER’s Products under this Agreement for the
                                         previous twelve (12) months or from and after the last such audit, whichever period is
                                         shorter;



 


 



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		7.2	Conduct
                                         a physical inventory of SUPPLIER’s Products purchased under this Agreement at any
                                         stocking location; and



		7.3	Have
                                         the audit performed by SUPPLIER and not third party auditors unless specifically approved
                                         by the DEALER.



 


The
audit and inventory will be carried out at reasonable times and in a manner that will not disrupt or otherwise materially adversely
impact the conduct of DEALER's or the Supplier’s business. SUPPLIER’s auditors will sign non-disclosure agreements
before being permitted to perform audit.


 


		8.	Orders;
                                         Delivery; Rescheduling; Cancellation.



 


		8.1	Orders.
                                         SUPPLIER will acknowledge each DEALER purchase order, in writing, at the earliest
                                         practicable date, but in any event within five (5) business days following receipt thereof
                                         and will confirm the requested shipment date or specify an alternative shipment date
                                         (“Acknowledged Shipment Date”). DEALER must submit a $5,000 deposit with
                                         AgEagle Aerial System for each system being ordered. Should SUPPLIER not accept any order,
                                         the SUPPLIER will return the $5,000 deposit immediately. SUPPLIER shall have no liability
                                         to DEALER or any of its customers as a result of SUPPLIER’S rejection hereunder
                                         of any orders submitted by DEALER.



		8.2	Delivery.
                                         Delivery terms for the Product shall be Ex Works (“EXW”) SUPPLIER’S
                                         Neodesha, Kansas facilities under INCOTERMS 2010. DEALER shall pay all costs relating
                                         to transportation, storage, delivery, duties and insurance. DEALER shall provide SUPPLIER
                                         with instructions on the applicable order.



		8.3	Rescheduling.
                                         DEALER may, on at least 60 business days prior written notice, reschedule the Acknowledged
                                         Shipment Date of any order without cost or penalty. DEALER may not cancel orders or risk
                                         losing all or part of deposits.



		8.4	Cancelation
                                         / Returns. DEALER may not return products for a refund but credits to DEALER'S
                                         account may be considered by supplier, but solely at the discretion and approval of the
                                         SUPPLIER.



		8.5	DEALER’s
                                         Acceptance. DEALER’s acceptance of Products will occur upon its receipt
                                         and inspection of the Products unless DEALER notifies SUPPLIER that the Products are
                                         defective or do not conform to the SUPPLIER’s applicable warranty, the terms of
                                         this Agreement, or DEALER’s order. DEALER will use its reasonable commercial efforts
                                         to provide such notice within 5 days of its receipt of the Products. DEALER may return
                                         for full credit any and all Products found to be defective at delivery, or within a reasonable
                                         time thereafter. Acceptance of Products under Section 8.3 shall have no affect on the
                                         warranty terms in Section 13 herein.



		8.6	Early
                                         Shipments. Products delivered more than 15 business days prior to their Acknowledged
                                         Shipment Date will be accepted by the DEALER.



 



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		9.	Shipping
                                         and Risk of Loss.



 


		9.1	Packing.
                                         All packing materials and methods for Products will conform to standard industry
                                         practices.



		9.2	Delivery.
                                         DEALER will pay all delivery costs to deliver Products to DEALER’S facility,
                                         customer’s facility, or other location designated by DEALER.



		9.3	Title
                                         and Risk of Loss. Title (exclusive of the SUPPLIER’s retained intellectual
                                         property rights) and risk of loss shall be transferred from SUPPLIER to DEALER when SUPPLIER
                                         delivers the Product at the disposal of DEALER at SUPPLIER’S Neodesha, Kansas facilities.
                                         DEALER shall be solely responsible for filing claims relating to any lost goods or goods
                                         damaged in transit. Shipping dates are approximate. In no event shall SUPPLIER be liable
                                         for any re-procurement or cover cost for delay in shipment or non-shipment due to causes
                                         beyond SUPPLIER’s reasonable control.



 


		10.	Prices,
                                         Price Changes and Taxes. DEALER will pay the prices for Products as set forth
                                         in SUPPLIER’s Price List in effect as of the date of this Agreement.



 


		10.1	Price
                                         Changes. SUPPLIER may change the prices contained in the Price List, but the
                                         change will not be effective to DEALER unless SUPPLIER gives at least 30 days advance,
                                         written notice to DEALER.



		10.2	Price
                                         Increases. Prior to the effective date of a price increase, DEALER may order
                                         Products requesting delivery within 30 days, at the prior, lower price. Products shipped
                                         under orders submitted by DEALER prior to the effective date of any price increase will
                                         be shipped and invoiced at the price in effect at the time of order placement.



		10.3	SUPPLIER’s
                                         Pricing Representation. SUPPLIER represents and warrants that its practices and
                                         policies, including prices and discounts, comply with all applicable laws.



		10.4	Special
                                         Pricing. If SUPPLIER offers
                                         DEALER special pricing, additional discounts
                                         or any other terms pursuant to program offers, DEALER may
                                         adjust the prices of and discounts for Products in its Purchase Orders to reflect such
                                         terms.



		10.5	Special
                                         Purchases. SUPPLIER and DEALER may, at any time during the term of this Agreement,
                                         enter into separate agreements for the special purchase of Products, including non-standard
                                         Products. Such agreements will be subject to all terms and conditions hereof unless inconsistent
                                         with the terms of such special agreements or unless otherwise agreed.



		10.6	Taxes.
                                         All prices quoted are exclusive of all taxes. SUPPLIER
                                         will invoice DEALER for
                                         all taxes applicable to sales of the Products, itemized by type and jurisdiction, which
                                         SUPPLIER is required by law to collect from DEALER.



 



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		11.	Payment
                                         and Credits.



 


		11.1	Payments.
                                         SUPPLIER will invoice DEALER via
                                         electronic transmission no later than 10 business days after shipment or delivery of
                                         Products. Such invoices will be due within 15 days of the invoice date. SUPPLIER reserves
                                         the right to cancel or suspend any Orders placed by DEALER and accepted by SUPPLIER,
                                         or refuse or delay shipment thereof, if DEALER fails to: (a) make any payments as provided
                                         herein or in any invoice provided by SUPPLIER; or (b) otherwise comply with the terms
                                         and conditions of this Agreement. DEALER will pay SUPPLIER all amounts due under this
                                         agreement within two weeks of the effective date of any termination or expiration of
                                         this agreement.



		11.2	Credits.
                                         In the event DEALER is entitled to a credit from SUPPLIER that amount will be credited
                                         to the DEALER'S account.

                                         




		12.	Product
                                         Changes.



 


		12.1	Addition
                                         and Deletion of Products. SUPPLIER may add or delete Products from its price
                                         List upon 15 days prior written notice to DEALER.



		12.2	Obsolescence
                                         and Modification. SUPPLIER reserves the right to (i) discontinue the manufacture
                                         or sale of, or otherwise render or treat as obsolete, any Product, (ii) modify the design
                                         or manufacture of any Product. DEALER will not return any unsold product to the SUPPLIER
                                         that is replaced by newer products developed by the SUPPLIER. Returns will not be accepted.
                                         The DEALER understands that this technology is rapidly evolving and changing. Thus, it
                                         is important that the dealer continually sells through existing inventory.



		12.3	Introduction
                                         of New Products. SUPPLIER will give DEALER at least 15 days prior written notice
                                         of the introduction of any new Products that preclude or materially limit DEALER from
                                         selling any of SUPPLIER’s Products. The burden of dissolving unsold inventory is
                                         with the DEALER. The SUPPLIER will not give credit or refunds for any returns of previous
                                         technology.



 


		13.	Warranty.



 


		13.1	Warranties
                                         to DEALER. SUPPLIER warrants to DEALER and its customers that: 



		a)	Products
                                         conform to their published documentation and are free from defects in design, workmanship
                                         and materials under normal use for the life of the product; and 



		b)	No
                                         suit or proceeding is pending or threatened alleging that any Products, regardless of
                                         their combination with other components, infringe upon or misappropriate the intellectual
                                         property rights of any other person or entity; and



		c)	DEALER
                                         is authorized to pass warranty through to DEALER's customers and to end users. The warranty
                                         period begins to run upon delivery of the Product to the end user.



 



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		13.2	Warranty
                                         Indemnification. Despite anything to the contrary contained in SUPPLIER’s
                                         warranty or elsewhere in this Agreement, SUPPLIER will indemnify DEALER against, and
                                         hold it harmless from, any cost, loss, damage or liability (including reasonable attorney's
                                         fees and any deposition costs) arising from or related to SUPPLIER's conduct or the failure,
                                         or alleged failure, of the Products, as manufactured and sold to DEALER, to fully comply
                                         with all applicable laws, standards, codes, specifications and regulations or to be suitable
                                         for resale or other dealer by DEALER as contemplated by this Agreement. All warranty
                                         and indemnification provisions of this Agreement will survive the termination hereof.



		13.3	Disclaimer
                                         of Warranty. Except as set forth herein, DEALER disclaims all warranties with
                                         regard to SUPPLIER’s Product(s), including without limitation, the implied warranties
                                         of merchantability and fitness for a particular purpose. This section shall survive termination
                                         or expiration of this Agreement.



		13.4	Limitations
                                         of technology. The DEALER must understand that remote sensing technology like
                                         the AgEagle Aerial System is a new and evolving technology and agrees to communicate
                                         this to customers prior to their purchase of a system. Although the aerial mapping system
                                         is superior to the way it was just a few months ago, when crops become mature, the processing
                                         of aerial images becomes more difficult and in some cases it is not possible to create
                                         high quality aerial images. Although the goal is to create high quality aerial images,
                                         it is not always possible.



 


		14.	Intellectual
                                         Property.



 


		14.1	Indemnification.
                                         SUPPLIER will indemnify, defend, and hold DEALER, its successors, assigns, customers
                                         and end-users harmless against all loss, damages, costs and expenses (including reasonable
                                         attorneys’ fees and costs of establishing rights to indemnification and any settlement
                                         including deposition costs) based on any claims, demands, suits, proceedings and actions
                                         (“Claims”), in connection with any alleged infringement of any patent, copyright,
                                         trademark or other intellectual property right of a third party, including any Claims
                                         that the product, or the process, design, or methodology used to manufacture the Product
                                         infringes any third party patent, copyright, trademark or other intellectual property
                                         right.



		14.2	DEALER
                                         Assistance. DEALER will provide SUPPLIER with written notice of any such Claims,
                                         grant full authority to SUPPLIER to defend and settle such Claims, and upon SUPPLIER’s
                                         request, provide reasonable assistance and information, at SUPPLIER’s reasonable
                                         cost and expense.



		14.3	SUPPLIER
                                         Claim Duties. If a Product becomes the subject of a Claim or DEALER is enjoined
                                         from selling or using a Product, SUPPLIER will have the option to:



		a)	Procure
                                         for the DEALER the right to sell and use the Product;



		b)	Provide
                                         the DEALER with replacement or modified Product that is non-infringing; or



		c)	If
                                         SUPPLIER is unable to provide the remedies in 14.3(a) or (b), refund the full purchase
                                         price for such Product.



 



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		15.	General
                                         Indemnification. SUPPLIER will indemnify and hold the DEALER harmless of and
                                         from any and all liabilities, losses and damages (including costs, expenses and attorneys'
                                         fees, and costs of establishing rights to indemnification including deposition costs)
                                         resulting from any claim of any of DEALER's customers or any other third party, including
                                         employees of DEALER or SUPPLIER, for death, personal injury, breach of warranty, acts
                                         of omission or representations of the SUPPLIER, or damage to property arising out of,
                                         or in any way connected with, the Products or the use or operation thereof.



 


Neither
party will be liable to the other pursuant to this Agreement for amounts representing indirect, special, incidental, consequential
or punitive damages of the other party arising from the performance or breach of any terms of this Agreement.


 


		16.	Termination.



 


		16.1	Termination
                                         for Convenience. Either party may terminate this Agreement without cause and
                                         at any time upon giving 30 days prior written notice to the other party. Such termination
                                         will be effective on the date stated in the notice.



		16.2	Termination
                                         for Cause. Either party may terminate this Agreement immediately for cause in
                                         the event the other party:



		a)	Becomes
                                         insolvent; or



		b)	Assigns
                                         or transfers, either voluntarily or by operation of law, any or all of its rights or
                                         obligations under this Agreement without having obtained the prior written consent of
                                         the other party; or



		c)	Upon
                                         the filing of a petition by or against it under any state or federal bankruptcy or insolvency
                                         law, fails to tender to the other party a guaranty of its obligations under this Agreement
                                         by a person, firm or other entity having a net worth of at least 85 percent of its own
                                         net worth as of the commencement of this Agreement, such guaranty to be in a form satisfactory
                                         to the other party; or



		d)	Fails
                                         to perform any of its material obligations under this Agreement and fails to cure such
                                         default within 30 days after written notice.



		e)	Fails
                                         to secure or renew any license, permit, authorization or approval that is essential for
                                         the conduct of business in any significant area of the Territory; or has any license,
                                         permit, authorization or approval revoked or suspended.



		f)	Violates
                                         any applicable law or regulation of a governmental entity.



 



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		16.3	Effects
                                         of Termination:



		a)	If
                                         Agreement is terminated by SUPPLIER under 16.1 or by the DEALER, the SUPPLIER is not
                                         obligated to repurchase any unsold Products in DEALER's inventory.



		b)	After
                                         any termination of this Agreement, SUPPLIER will sell to DEALER any products that DEALER
                                         is contractually obligated to furnish to a customer if DEALER orders such Products within
                                         15 days after the effective date of termination.



		c)	SUPPLIER
                                         shall pay DEALER for purchases under Subsection 16.4 within 30 days from shipment of
                                         the Products by DEALER.



		16.4	Outstanding
                                         Orders. In the event of any termination, SUPPLIER shall, if requested to do so
                                         by DEALER, honor any open DEALER purchase order then outstanding.

                                         




		17.	Confidential
                                         Information. Each party will receive and maintain in confidence all proprietary
                                         information, trade secrets or other know-how belonging to the other (including but not
                                         limited to knowledge of manufacturing or technical processes, financial and systems data,
                                         and customer information) provided that any such information, secrets or know-how is
                                         expressly designated as being confidential, except and to the extent that disclosure
                                         is required by law, regulation or court order, or enters into the public domain through
                                         no fault of the party obligated to maintain such confidentiality. Without limiting the
                                         foregoing, all material and information made known to SUPPLIER by DEALER pursuant to
                                         Section 5 of this Agreement is hereby designated as confidential. The obligation not
                                         to disclose will be for a period of two (2) years from receipt of the confidential information
                                         unless otherwise agreed to by both parties.



		18.	Use
                                         of Trademarks/Trade names. This Agreement does not create, and neither party
                                         will have any right in, or to the use of, any mark, name, style or logo of the other
                                         party. DEALER is, however, hereby granted a nonexclusive right to use SUPPLIER's marks,
                                         names or logos to identify itself as an authorized DEALER of the Products and for advertising
                                         and promoting its services under this Agreement.



 


		19.	General
                                         Provisions.



 


		19.1	Independent
                                         Contractors. SUPPLIER and DEALER are independent contractors and each is engaged
                                         in the operation of its own business and neither will be considered the agent of the
                                         other for any purpose. Nothing contained in this Agreement will be construed to establish
                                         a relationship that would allow either party to make representations or warranties on
                                         behalf of the other except as expressly set forth herein.



		19.2	Assignment.
                                         Neither party may assign this Agreement in whole or in part without the prior written
                                         consent of the other, which will not be unreasonably withheld. This agreement will be
                                         binding upon and inure to the benefit of the parties and their successors and assigns.



 



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		19.3	Entire
                                         Agreement. This Agreement contains the entire understanding of the parties with
                                         respect to the subject matter and supersedes all related prior agreements between the
                                         parties. Amendments to this Agreement must be in writing, signed by the duly authorized
                                         officers of the parties, specifically stating that such amendments are made pursuant
                                         to this Agreement.



		19.4	No
                                         Implied Waivers. The failure of either party at any time to require performance
                                         by the other of any provision will not affect the right of such party to require performance
                                         at any time after, nor will the waiver of either party of a breach of any provision be
                                         taken or held to be a waiver of a provision itself.



		19.5	Severability.
                                         Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction
                                         will be ineffective to the extent of such prohibition or unenforceability without invalidating
                                         the remaining provisions hereof in that jurisdiction or affecting the validity or unenforceability
                                         of such provision in any other jurisdiction.



		19.6	Survivorship.
                                         All obligations and duties of the parties that by their nature extend beyond the expiration
                                         or termination of this Agreement, will survive and remain in effect beyond any expiration
                                         or termination hereof.



		19.7	Force
                                         Majeure. Neither party will be liable for failure to fulfill its obligations
                                         under this Agreement or any purchase order issued hereunder or for delays in delivery
                                         due to causes beyond its reasonable control, including, but not limited to, acts of God,
                                         acts of terrorism, epidemic, acts or omissions of the other party, man-made or natural
                                         disasters, strikes, delays in transportation or inability to obtain labor or materials
                                         through its regular sources. The time for performance of any such obligation will be
                                         extended for the time period lost by reason of the delay.



		19.8	Conflicting
                                         Terms. The parties agree that the terms and conditions of this agreement will
                                         prevail not withstanding contrary or additional terms in any purchase order, sales acknowledgment
                                         confirmation or any other document issued by either party affecting the purchase or sale
                                         of Products.
		19.9	Notices
                                          Notices and other communications by either party under this Agreement shall
                                         be deemed given when delivered by hand or deposited in the United States mail as certified
                                         mail, postage prepaid, addressed to the chief executive officer of the other party at
                                         its then principal place of business as follows:



 


If
to SUPPLIER:


 


AgEagle
Aerial Systems, Inc.


117
South 4th Street


Neodesha,
Kansas 66757


Attention:
Bret Chilcott


 



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If
to DEALER:


Agribotix,
LLC


3309
Airport Road


Boulder,
Co 80301


Attention:
Paul Hoff


 


		19.10	Affiliates.
                                         DEALER is entering into this Agreement on its own behalf and on behalf of its Affiliates
                                         and is acting as their agent for the purposes of this agreement. Whenever reference is
                                         made herein to “DEALER”, such reference shall be deemed to include all Affiliates
                                         of DEALER. The rights and obligations of DEALER shall inure to the benefit of DEALER’s
                                         Affiliates and may be directly enforced by either DEALER and/or any such Affiliate. For
                                         the purposes of this agreement, the term "Affiliate" shall mean any entity,
                                         which directly or indirectly controls, is controlled by, or is under common control with
                                         DEALER.



		19.11	Governing
                                         Law. This Agreement will be interpreted in accordance with the laws of the State
                                         of Kansas. SUPPLIER agrees that it will be subject to personal jurisdiction within the
                                         State of Kansas.



		19.12	Compliance
                                         with Laws. SUPPLIER represents and warrants to DEALER that its practices and policies
                                         (whether manufacturing or otherwise), including any prices or discounts extended to DEALER
                                         in connection with products, comply with all applicable U.S. and international laws.



 


 


	 	AGREED THIS	 	AGREED THIS
	 	 	 	 
	 	November 20, 2017	 	November 20, 2017
	 	 	 	 
	 	AgEagle
        Aerial Systems, Inc.

        117
        S. 4th Street

        Neodesha,
        KS 66757

         

         

         

        By
        ___________________________

         

        Title
        __________________________
	 	Agribotix,
        LLC

         3309
         Airport Road,

	 Boulder,
  CO 80301

	  

         

         

        By
        ___________________________

         

        Title
        __________________________

    



 



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